PCarroll

Pat Carroll - ValidSoft

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.

Casting a vote in the race towards American mobile payments

30 April 2012 | 4582 views | 0

The 57th presidential election might be one of the most talked about contests in the U.S. this year, but if you really want to see some action it’s the U.S. payments space where your attention needs to be. The way things have been shaping up over the last
few months, by the time the next president knocks on the door of the White House, there will have been enough twists and turns in the battle for mobile payments market share to have kept even the most disillusioned voter hooked.

While the likes of Google and Paypal have been driving forces behind the technology, these big players are by no means home and dry. Mobile network operators are still very much in the game, namely in the form of ISIS. By this summer, the Isis Mobile Wallet
will be available to more than 100 million U.S. card holders, with Chase, Capital One and Barclaycard all having entered into agreements which enable their credit, debit and prepaid cards to be placed into the mobile wallet. And then you’ve got the retailers
themselves, which is where the battle really gets interesting. Just last month came news that Wal-Mart and Target are teaming up with roughly twenty other retailers to develop a new phone-based mobile payment system aimed at competing with the two aforementioned
groupings.

What’s interesting to me about this is the reasoning behind retailers joining the race. It’s been reported that because of reports of security holes in existing systems, retailers have decided they can do better themselves, in terms of privacy and security
and in providing targeted offers. This shows how important security is, a real competitive differentiator, in fostering consumer trust in any new payment system.

In a recent
Javelin Research survey of over 5,000 Americans, trust was identified as one of three crucial ingredients for success in the payments market. And who did consumers trust? While none of the five banks, five payment networks, three wireless carriers or four
tech giants reached Javelin's 'gold zone', Javelin reported that many of the newer players have work to do and that financial services providers still look to be in the driving seat (PayPal did serve as an exception, coming the closest).

So as the tech companies, the Mobile Network Operators, banks, schemes and the retailers continue to race towards the finish line, and keep us all on the edge of our seats as to who’s going to come out tops with consumers, my money remains firmly on the
fact that security, consumer trust and ease of use are the most important factors that will dictate success.

Pat's profile

Throughout his career, Pat has been at the forefront of industry thinking, representing organisations on industry bodies and leading participation in industry initiatives. At ValidSoft, he leads the R...